Examination of Witnesses (Questions 1-123)|
Charles Hendry MP. Hergen Haye. Anne Stuart
30 November 2010
Q1 Chair: Minister, good afternoon
and welcome to this session. We are glad to have you back again.
As you know, a couple of members of the Committee were colleagues
of yours on this Committee during the previous Parliament. They
have promised to remind you of all the things that you said then,
and to see if there is any compatibility with what you are going
to say this afternoon.
May I begin by drawing attention to my entry
in the Register of Members' Financial Interests? I have an interest
in a company that is involved in renewable energy.
Could I ask you just to take us through the
informal ratification process so that we understand exactly how
it is going to work?
Charles Hendry: Parliamentary
Charles Hendry: First, perhaps
I can say that I am joined by Hergen Haye, who is head of new
nuclear in the Department, and by Anne Stuart, who is head of
planning reform. I hope it will be acceptable to the Committee
for them to join in on some of the answers, especially where my
comments are not entirely consistent with what I might have said
in my previous life. I think that we have a smooth transition
across there to ensure that we have a consistent picture.
In terms of the process that we are looking
at now, there is a three-month consultation taking place on the
national policy statement. We took a view that we ought to go
through a formal re-consultation. It was pointed out to us that
the appraisal of sustainability was not as clear and as forceful
as it needed to be. We agreed with that representation, and, as
that was in the overarching national policy statement on energy,
we decided it was sensible to re-consult on all of themall
the six individual ones as well. Therefore, people can have a
chance to see how we've reacted to the initial round of consultation,
which ends on 24 January. There is then a need to put this through
Parliament formally. In terms of the technicality, we have committed
to there being a parliamentary vote. Under the old legislation,
that would not be binding, but we have said that the Government
would be bound by it, because that is a change that we intend
to make in due course.
Q2 Chair: Do we get the chance
to vote individually? Will we actually vote on the energy NPS?
Charles Hendry: You'll vote on
each of the six NPSs. You will have a chance to vote individually
on them, but my understanding at this point is that it will be
an unamendable motion. You will be able to vote in favour of or
against each individual NPS.
Q3 Chair: Are there individual
debates, or is it one debate on all the NPSs and we just get up
and say what we think about them?
Charles Hendry: I think the Committee
would have a chance to feed into that structure. No firm decision
has been made. If you thought it would be important to be able
to discuss them individually, I think that the Committee could
make its views known to the Leader of the House. We have chosen
to follow up on the advice of the previous Committee, and that
is why we have a debate tomorrow to give other Members of the
House a chance to have their views heard.
Q4 Sir Robert Smith: Why have
the Government rejected the concept of an amendable motion, under
which the House could express its views through amendments? It
might not want to reject the whole NPS, but may see a flaw in
Charles Hendry: Looking at the
complexity of it, perhaps a formal amendment could be accepted
by Mr Speaker. But what would be difficult in the planned structure
would be to allow, as in the Committee stage of a Bill, potentially
many hundreds of amendments to be considered. There cannot be
amendment in detail, but if people choose to put down amendments,
it will be up to Mr Speaker to decide whether to accept them.
Q5 Chair: The actual process of
ratification is set out in the localism Bill.
Charles Hendry: It will be.
Q6 Chair: Are we likely to have
the benefit of seeing that before we have these debates?
Charles Hendry: Yes, my expectation
is that we will. Anne, you might wish to comment further.
Anne Stuart: It is actually my
colleagues in the Department for Communities and Local Government
who are producing it, but I know they are working very hard to
do so very soon, so I would hope that we would have it before
the end of our consultation.
Chair: Okay. That's encouraging.
Q7 Albert Owen: May I just take
up the theme that you're developing, Chair? I'm a little bit confused.
We will have the localism Bill and the Department for Communities
and Local Government, but will we see your good self and other
members of the DECC team when we're talking about the energy policy
Charles Hendry: My expectation
is that it would be the DECC team that would take the energy policy
statement through the process in the House. As we have said, the
law will not, at that point, have been changed to require a parliamentary
vote on the matter, so we are doing this essentially as a matter
of the Government saying, "As this will be the policy we
expect in due course, if the legislation goes through, we'd like
to give colleagues a chance to vote on it at this point."
My expectation is that it will be us leading it, because, in terms
of the nature of the debate, I think that people
Q8 Albert Owen: Following that
logic, we are going to have a couple of days' debate on each NPS.
Charles Hendry: I think you would
have a couple of days' debate on the energy NPSs, perhaps, rather
than on each individual NPS, but that is essentially a matter
for the business managers, rather than for us directly. It is
for them to see how best they can ensure that colleagues have
a chance to have their opinions heard.
Q9 Albert Owen: May I move on
to the changes to the Planning Act 2008? I know that we've had
these conversations in other debates before, but why did you think
that it was necessary to abolish the IPC and replace it with the
Charles Hendry: We felt that the
nature of the IPC did not have sufficient parliamentary scrutiny
and democratic accountability. As a part of that process of localism
and of ensuring that people's views were heard, we took a view
that the back-office function should continue as beforeit
would therefore be part of the MIPU within the Planning Inspectoratebut
that the final recommendations should go to Ministers. We believe
that that means that people can question Ministers more effectively.
They can be called before Select Committees. They are acting in
a sort of quasi-judicial capacity, but there is a greater degree
of democratic accountability. We believe that that makes the whole
process more robust and, in terms of the potential legal challenges
that might come through, we think that if we have gone through
that process, we will ensure that the decisions are more robust.
Q10 Albert Owen: I understand
the democratic argument and that an elected Minister of the Crown
will make a decision. What I do not understand is what you said
about localism, because London is hardly local to people in the
north-east of England or the north-west of Wales. I do not understand
the localism element there. Are you suggesting that the Minister
would literally listen to the views of that locality when a particular
project had been put forward for that area?
Charles Hendry: The views of that
locality will be a relevant planning matter, but the Member of
Parliament for that area has the opportunity to question the Minister.
Making sure that the views of local people are represented in
that process is done, at the moment, through the Select Committee,
which is the only opportunity that people have. Clearly, your
own constituents would have a chance to be heard but, for most
of the other nuclear sites, they would not have the same chance
to be heard. We believe that the process that we are going through
therefore allows local opinion to be taken into account more effectively
Q11 Albert Owen: I understand
the theory, but when the IPC was set upI know nothing has
come forwardthere were local meetings and local information
from DECC and BIS. As a local MP, I have already been involved
in that. Although I do not take the decisions, I have already
been involved, so I do not understand the difference.
Charles Hendry: It is a different
stage of the process, because fundamentally the point where we
are making the difference is after the internal assessment has
been carried out and a recommendation is made. Under the current
process, which was set in place by the previous Government, the
IPC would make the decision as an independent committee, but that
was not subject to parliamentary scrutiny. The change we will
make is that that decision will be made by the Secretary of State,
who can be scrutinised by Parliament. It is at a different stage
of the process where we will continue to encourage and hear local
Q12 Albert Owen: Have you made
any estimates of the costs to abolish the previous regime, operated
by the Labour Government, of the IPC and to move to the new one?
Charles Hendry: In some areas
there will be savings from that. In terms of the work, the recommendation
will be carried across the Department. We believe that, with our
existing resources, we can scrutinise that to make a final decision.
At that point, some of the overheads will be reduced. Anne, you
have carried out more detailed assessment of that work.
Anne Stuart: CLG colleagues are
carrying out that sort of work as part of the preparations for
the localism Bill, because obviously it will be part of their
impact assessment, but I do not have the figures yet.
Q13 Albert Owen: But Minister,
you're saying that there could be some savings. Is that your position?
Charles Hendry: Absolutely, but
the policy is not driven by a desire to make savings; it is driven
by having a more thorough and robust process.
Q14 Albert Owen: It is not a trick
question. Will costs be incurred by moving from one regime to
Charles Hendry: In terms of the
transition, we believe not, because together with DCLG we are
looking at a very smooth transition process. There should not
be a hiatus in decisions being made and there should not be a
transition cost involved in that process. In terms of a fuller
answer, it would clearly be DCLG that has done the most detailed
Q15 Albert Owen: You talk about
the transition period. Is it your view and your Department's that
the transition might cause delays in projects moving forward and
could have an impact on investment in the future?
Charles Hendry: The expectation
is that there will be a time constraint on the process, which
could be very similar to that which is currently in place under
the existing IPC system. Again, that is a DCLG lead. It is finalising
its recommendations in that respect and also looking at the transitional
elements, because we are very keen to reassure investors that
there will not be delays as a result of the transition process.
DCLG will set out the final detail on that as part of the localism
Q16 Albert Owen:
Do you not accept that when we moved from the previous regime
to the IPC, there was a lack of projects coming forward, which
was to do with a new system being set up? Isn't that likely to
Hergen Haye: Not really, because
it has been clearly set out that any application that comes forward
now will be considered by the IPC, as long as the IPC continues
to exist. At the stage when the IPC is abolished through the localism
Bill, such an application will transfer to the new body and to
the Secretary of State for final consideration. It is clearly
put out by CLG that the aspects that have already been completed
will not be undertaken again. Anyone who puts in an application
now can have confidence that that work is not wasted.
Q17 Albert Owen: But you do accept
that there were delays beforethat things were kept on hold
when there was the change to the IPC.
Anne Stuart: I don't think that
we've got any evidence that people were holding things up. If
anything, there was a slight bulge of applications just before,
which is what caused the dip afterwards. Developers had an attack
of "better the devil you know," and put in their applications
quickly, and therefore there was less to come through in the first
months of the IPC.
Q18 Albert Owen: Moving on to
the decision making and the role of the Secretary of State in
this, are we talking about the Secretary of State for Communities
and Local Government making the decisions or, in the case of nuclear
power stations or CCS, are we talking about the Secretary of State
Charles Hendry: A final decision
is still to be made on which will be the appropriate Secretary
of State, and that will be set out in the Bill.
Q19 Albert Owen:
But don't you think that that's fundamental, and that it shouldn't
be something that you're waiting for? If the energy industry wants
to invest, it really needs to know who's going to make that decision.
Charles Hendry: And
it will do. The localism Bill will set out exactly that detail,
but it would be wrong to start chipping away at elements of that
Bill. If parts of it were set out at this stage people would say,
"Okay, you've told us that; would you now clarify this? If
not, why not?" Part of the nature of government is that it
is sensible to package elements together so that people see the
full picture. At that point, it will be absolutely clear which
Ministers will be making the decisionsit will be in very
Q20 Albert Owen: As a Welsh Member,
I am concerned about that. Local government is devolved in Wales,
so if the Communities and Local Government Department was making
the decision, you could have a planning department in England
making decisions about planning in Wales, whereas now it's pretty
clear that developments of less than 50 MW are the responsibility
of the National Assembly for Wales and anything over that is the
responsibility of the Secretary of State for Energy. That clarity
is there now; shouldn't it be carried forward? Isn't that something
that DECC could be lobbying on?
Charles Hendry: There have been
representations on both sides of the argument. Some people have
said that it would be better if it was done by DCLG, because it
has no inherent interest in the outcome, whereas it could be said
that DECC as a Department has a vested interest in certain plants
being approved. The alternative view is that the relevant Minister
who has the greatest policy involvement and understanding of the
issues should be the one to do it. So it is exactly those issues,
and particularly how they relate to the devolved Governments,
that have to be resolved at this point.
But in terms of the process moving forward,
when people come to make an application, this will have been resolved
many months beforehand. There will be no doubt in anyone's mind
by the time that the IPC eventually goes and our new system is
put in place, because the localism Bill setting this out with
absolute clarity will by then have become an Act, and therefore
that detail will be absolutely clear to people making an application.
Q21 Albert Owen:
Do you envisage the Secretary of State overturning the experts
in the unit?
Charles Hendry: I think that it's
right that the Secretary of State brings an independent mind to
it and looks at it properly. I think that that's what people would
expect the IPC to do, and what they would expect the Secretary
of State to do. So, if the Secretary of State feels that there
are aspects that were not properly taken into account in a recommendation,
I think that it would be entirely proper for the Secretary of
State to make that choice.
Q22 Albert Owen:
But would he be influenced by political pressure?
Charles Hendry: Speaking for the
team I know, they would make the decision based on the evidence.
Albert Owen: We don't even know who's
going to make that decision yetexcept that it's a Secretary
Charles Hendry: The
system would become discredited if the choice was made under political
pressure. It has to be seen to be a thorough and independent process,
and that would therefore be a fundamental part of the process
Q23 Albert Owen: I just want a little
bit on that. If a Secretary of State makes a decision that the
industry's not happy with and, in the spirit of localism, the
local community's not happy with it, how will they be able to
appeal against it? Has that mechanism been decided?
Anne Stuart: There is an appeal
mechanism in the current Planning Act, so I imagineI haven't
seen the final draftthat there would have to be a parallel
equivalent. At present, of course, if a Minister makes a decision,
there is an appeal by judicial review
Q24 Albert Owen: Is that a likely
avenue? If a Secretary of Statea Minister of the Crownhas
made a decision, how can that be challenged other than by a judicial
Anne Stuart: I believe that the
IPC's decisions could be challenged, but there will be appeal
provision built in, which will have to be there because Ministers
must be challengeable in case there is some perception that there
is a mistake.
Q25 Albert Owen: I have one final
question; who else would the Secretary of State consult? He gets
the MIPU to give him the report, the recommendation is there and
he decides that he needs to consult somebody else, perhaps. Who
would that be?
Charles Hendry: The Secretary
of State would be expected to make a decision on the evidence
that is submitted to him. Once the process has started, if the
Secretary of State decided to consult somebody else, he would
also have to consult people on both sides of the equation or that
would undoubtedly lead to a greater risk of judicial review of
the decision that was made. However, the expectation would be
that the recommendation would be made to the Secretary of State,
including the reasons, and that would be the basis for the decision
that the Secretary of State makes.
Q26 Sir Robert Smith: Is the Secretary
of State acting in isolation, as an individual making that decision
and therefore, other Secretaries of State can lobby the Secretary
of State on the issue? Or, is it a collective Government decision
that is made?
Anne Stuart: In terms of the localism
Bill, I haven't seen anything on that. In general, the Secretary
of State acts for the Government when making such decisions.
Q27 Sir Robert Smith: I'm just
trying to pin this down, because it is a sort of quasi-judicial
Anne Stuart: Normally, when a
Minister of any kind is making a decision of this type, which
is effectively quasi-judicial, they can listen to people who want
to talk to them but they can't give any opinion on the merits
or otherwise of the application in front of them, until they have
made a decision. I would expect that to be the case, whether it
is somebody from industry, a local group, or an MP or a colleague
who wants to talk to him about it.
Charles Hendry: Inevitably, we
will be fairly cautious about expressing the view of another Government
Department. If it is helpful to the Committee, we can certainly
ensure that a Minister from DCLG writes to inform your decisions
and thinking in this area. However, I would be cautious about
us, at any time, trying to represent that, when it's a policy
Chair: There's no need to be cautious
in front of us, Minister. We're quite discreet about these things.
If you want to express a different view, we would welcome you
airing the debate, and the public can listen.
Q28 Christopher Pincher: My question
is similar to what was already asked about the MIPU, and it relates
to the NPSs themselves. I appreciate that they are being set up
to give business and other players some certainty as to what the
policy framework will be for a period of time going forward. As
I understand it, the Planning Act places a duty on the Secretary
of State to review each NPS whenever the Secretary of State thinks
that it is appropriate to do so. I wonder if you could give us
some indication of what triggers might encourage a Secretary of
State to look at an NPS.
Charles Hendry: Different elements
could affect that. If we look, for example, at the NPS on renewables,
we have not included tidal marine technologies because we do not
think that there is any likelihood, in the short term, of applications
coming through that would be above the 50 MW threshold. However,
as that situation hopefully changes, and we start to see some
significant tidal applications coming through, either a new NPS
will be required or an amendment to the renewables NPS. So, changes
in technology will change the situation.
We have considered what we see to be the energy
need up to 2025, and we have identified various elements within
that. We are not being specific on individual technologies, but
if it's clear that some of those will not be as substantial as
we may hope, further reflection will be needed on different ones.
Ministers have the ability to look at evidence that comes in and
ask whether that requires a change to the NPS.
Q29 Christopher Pincher: But will
example triggers, or a non-exhaustible list of triggers be laid
down to give everybody some indication of what you might look
at and when you might look to change an NPS? Otherwise, it gives
the impression that you can change them at will, or on a whim?
Hergen Haye: Given the rigorous
process an NPS has to go through to get established, there is
a presumption that we would like the NPSs to be robust and hold
out for quite a considerable period. It is the issues that we
don't know about that may present a possibility for the Secretary
of State to go back to the NPSs and ask whether the change has
any implications for what we have put forwardfor example,
if, in our progress towards 2025 and 2050 decarbonisation, findings
in the annual reports of the CCC suggested that we are not really
on target in terms of low-carbon technologies. The presumption
is that the NPSs should last for a considerable time.
Q30 Laura Sandys:
I want to move on from that and look at the actual planning process
itself. On the one hand, we are saying that the NPSs have a lot
of flexibility over a time period, but, on the other hand, they're
there to give reassurance for the £200 billion investment
that we require. Do you think that they give enough strategic
guidance and framework to make such investment decisions both
safe and predictable?
Charles Hendry: One has to look
at them as being part of the planning process. They are not part
of the decarbonisation process, nor are they part of moving towards
a low-carbon economy. They set the framework for major planning
decisions. I think that the thoroughness with which they address
those issues gives investors a significant amount of security.
Investors know which factors may be considered to be material,
and which factors will not be considered to be relevant to an
application. We have sought to do that in order to give that degree
of security and structure. If anything, in the course of the process
we have further tightened the NPSs, and we now believe that they
are more robust than they were in the initial round of consultation,
thanks to the feedback that we received on that consultation process,
to try to give as much clarity to investors as possible.
Q31 Laura Sandys: One of the interesting
things is that we have a set of energy NPSs, but we also have
other NPSs from different Departments. In many ways this follows
on from Albert's pointwho has hierarchy? Let me give you
an example of thatbiomass. Some people, myself included,
feel that food security will be an issue in about 30 years' time.
Who has hierarchy when we start to look at NPSs? Is, for example,
the National Security Council involved in advising different Departments
on such competing issues. The Department for Transport, again,
has its own NPSs and it will be looking at key strategic issues.
Who overrides whom? Again we come back to the question Albert
asked. Who ultimately will then be the arbitrator, or make the
decisions, on NPSs when there are competing interests?
Charles Hendry: These are not
being worked up by just the Department. They are being worked
up in consultation with other Departments, so we are aware of
what the Department for Transport is working on, and it is aware
of what we are working on. There should be no inconsistency and
no conflict between the National Policy Statements in those areas.
If there is, clearly we would wish to address that and the Government
would have to establish which NPS has precedence.
Biomass is an example of where the Government
and the Department itself would have precedence, because on biomass
it would not be the job of the IPC to look at issues of sustainability.
The Government would determine sustainability for biomass. In
the new year we will be setting out what we believe are the appropriate
sustainability criteria for biomass in terms of land diversion
and the source of crops, and we will ensure that they meet our
standards. That will not be part of the IPC process.
Q32 Laura Sandys: Taking that
forwardyou're looking at very long term investmentsare
you working closely with the Horizon group in BIS on some of the
issues that it is looking at at the moment? The Horizon group
is, again, looking at water security, food security and fundamental
changes that are covered by the other responsibility of your Departmentclimate
changeand how those will affect both these statements and
the outcomes of these statements.
Charles Hendry: The thing that
has impressed me most about being a Minister is the extent to
which there is co-ordination between Departments. We work extremely
closely with BIS, DEFRA and all other Departments on those matters.
We are looking to ensure that, when we reach a decision on sustainability,
every Department that has an interest in that area will have been
consulted on the way forward and agreed to it. If there isn't
agreement between the Departments, it will have to go through
a clearing process at the Cabinet Office. We try to make sure
that, wherever there is a potential conflict between the ambitions
of different Departments, it is sorted out through that process.
Laura Sandys: I think
that clearing process is quite interesting from the point of view
of how one goes forward.
Q33 Sir Robert Smith: On the biomass
issueI suppose it comes back to the tension with which
the Committee grappled last timethose are planning guidelines
for planning use, but other instruments and levers of Government
will be there to control other agendas, such as the carbon content.
How are the Government planning to ensure that biomass is sustainable?
Is it through the financial incentive or through actual regulation?
Charles Hendry: It would be through
actual regulation and saying that, in order to qualify for a renewable
obligation certificate, it must meet certain criteria for sustainability.
Without being able to get the ROC support, clearly the investment
would not go ahead in any case.
Q34 John Robertson: Moving on
a wee bit, how do the new appraisals of sustainability fulfil
the requirements of the SEA directive?
Charles Hendry: We have sought
to be more robust. Hergen, perhaps you can give some more precise
detail about it, but we have looked at what was written initially
and have agreed that that was not as clear and as forceful as
it needed to be. Hergen, perhaps you can clarify further.
Hergen Haye: The issue was the
appraisal of sustainability for the overarching energy national
policy statement in EN-1 to EN-5. There was quite a robust AOS
for the nuclear one already in place, which was probably helped
because we had specific sites already in view with nuclear. But
it was felt that the overarching appraisal of sustainability didn't
adequately deal with a proper assessment of alternatives to the
policies we were putting forward. That robustness was, frankly,
lacking and, on advice, we decided to undertake that assessment
for the overarching energy NPS and EN-1 to EN-5. The result is
being published in this revised suite of documents.
Q35 John Robertson: What new data
will be required to monitor the implementation of the NPS?
Anne Stuart: Sorry, I'm not quite
sure that I follow.
John Robertson: You've just said that
there is going to be a different way of monitoring and looking
at it, so you must be looking at it in a different way.
Hergen Haye: I didn't say a different
way to monitor. When we assessed the policies that we put forward,
we didn't really evaluate other options or alternatives to the
proposals that we put forward. In a robust appraisal of sustainability,
you should also consider alternative possibilities and options.
That is the work we have undertaken. In many ways, the conclusions
to our policy haven't changed, but they are now more robust because
we can show and demonstrate in a transparent way that we have
actually assessed the alternatives.
Anne Stuart: In our previous assessment,
the alternatives were based on the assumption that, becauseas
I am sure you are awarewe had written the national policy
statements to reflect existing policy, we originally thought that
we couldn't think of alternatives to policy, because they weren't
in the gift of NPSs themselves. When we went back, we actually
looked at those alternatives to policy and assessed the impacts
of alternative policies.
Q36 John Robertson: So will the
Government produce the guidance to assist Departments in the future
production of NPSs?
Anne Stuart: The purpose of the
appraisal of sustainability that we did was to improve the energy
NPSs, and that process went on. I am sure that I am teaching my
grandmother to suck eggs, but the SEA, in principle, and the way
in which we have done AOSs are an iterative process. You work
with the person doing the appraisal to make sure that their results
feed back into the documents as they are being written, so the
final document already incorporates the outcome.
The other NPSs that are being written are subject
to their own appraisal of sustainability and will undergo the
same process. Having said that, we are obviously talking to the
other Departments. We have actually been talking about setting
up a meeting in which the people who did our appraisal can talk
to the people who are doing appraisals for other Departments,
so that we can do lessons learned.
Q37 John Robertson: Does that
mean that there is additional monitoring?
Anne Stuart: For the first time,
we have published the monitoring strategy, which is part of the
latest suite of documents, because, obviously, you always do a
monitoring strategy for any SEA appraisal.
Q38 John Robertson: Is there a
cost in that?
Anne Stuart: We're aiming to do
it as far as possible with existing strategic information. Because
the NPSs, with the exception of nuclear, are strategic and non-locational,
the AOS is also done at a strategic level. We are therefore aiming
to use existing strategic information rather than trying to start
doing major new equip.
Q39 John Robertson: So you're
saying that you want to get more with the same? I am trying to
work out where the departmental cuts come in and how you are going
to manage this.
Anne Stuart: The monitoring
strategy will use the sources of information we already collect.
There is a lot of information out there from Government, as everybody
knows, and we will use that to appraise the effects of the NPSs
themselvesobviously it is not the effect of the appraisal
but the effect of the NPSsand say, "Can we tell whether
certain key indicators have changed and do we think those key
indicators have changed as a result of NPSs, as opposed to as
a result of all the other things?"
Q40 John Robertson: The table
I have in front of me is rather complicated and has the short,
medium and long-term appraisal of whether it will be good, bad
or indifferent or, as it says here, "positive, negative,
neutral or uncertain". On a lot of them we have neutral and
uncertain or positive and uncertain. It strikes me that the whole
table is uncertain, so why bother putting it out?
Anne Stuart: Yes, it is uncertain
because we don't have details of what the actual sites will be
and what the things built on those sites will be. We know there
are liable to be, for instance, large and obtrusive things built
on the landscape if you are building energy infrastructure because
most of it is quite large and obtrusive. So we can say there is
a landscape effect. But we cannot be sure whether someone will
bring forward, say, a wind farm that they want to build on a peat
bog, which would have quite a major impact, or a wind farm that
they want to build on a brownfield site, which might have quite
a minor impact.
Q41 John Robertson: I go back
to the cost. You are doing the same or more but actually you are
going to have to do it with less because of Government cuts.
Charles Hendry: If you look at
the priorities of the Department we recognise that we have to
secure £200 billion in new investment in our energy infrastructure.
That is right up there at the top of our urgent needs for the
Department to do. We recognise that in the course of doing so
costs will be incurred in order to attract that investment to
the United Kingdom. But that is non-negotiable. That is what we
have to do as a Department if we are to guarantee our energy security.
Q42 John Robertson: I accept that,
Minister, and nobody would support you more than I do in relation
to investment. But at the end of the day, all these things are
at a cost. If we take our eye off the ball at any time and we
allow something to progress which should not have been allowed
to progress then we will have wasted a great deal of taxpayers'
money. My concern is about the monitoring and the cost and what
will be required, because you have said you have no idea what
may happen in the future. Therefore you are cutting back at a
time when maybe you should not be.
Charles Hendry: In terms of how
we make the Department work more efficiently and where we reduce
our costs, we are looking across the work of the Department and
we will have to prioritise the things that are most important.
Energy security and new plant investment is a very high priority
for us so we can be certain that that will be continued. We also
recognise that much of the costs of this workthe planning
costsare contributed to by the industries looking to invest
in that area themselves. The only way to try to address your issue
more fundamentally would be for us to say, "We want this
number of nuclear power stations, this number of gas power stations,
this number of turbines, this amount of biomass", and then
it becomes completely prescriptive and a potential nightmare.
The one thing that would happen immediately is that the costs
of all those technologies would go up because industry would say,
"Well, I didn't know you wanted that much. Now you want that
much I can't possibly deal with it without having some more support."
Our view is that we establish an assessment of need and we recognise
that there is a range of different ways in which that can be met.
Q43 John Robertson: My last comment
would be that it strikes me that you are putting an increased
reliance on the companies to do your work for you.
Charles Hendry: Well really it's
a belief that the market can deliver some of these solutions but
we will need to have a clearer framework within which we expect
the market to invest and to deliver. This has to be seen alongside
the other changes that are being made, such as the electricity
reform package, which will start to be consulted on formally in
the next couple of weeks, which will set out how companies can
expect to be compensated or to receive a return on their investment
in low-carbon generation. That's another part of the process.
At the end of the day we don't believe it is right for the Government
to be prescriptive on this and to say that we want this number
from each particular technology.
Q44 John Robertson: Okay, but
will you guarantee there will be monitoring of it?
Charles Hendry: There will be
monitoring, of course. If we are not monitoring it we do not know
what is coming through the system.
Q45 Barry Gardiner: Minister,
may I get clarity here? Is it true that the European Commission
guidance on the application of the SEA stipulates that alternative
policies should be addressed in the same way and to an equivalent
level of detail? Is that what the European Commission guidance
says? It is a straight yes or no.
Anne Stuart: I believe it says
that. I think it is talking about the alternative policies within
Q46 Barry Gardiner: And you have
made efforts to include greater alternatives?
Anne Stuart: Yes. You then, obviously,
do more work on your chosen alternative because that is the one
you will end up with.
Q47 Barry Gardiner: Sorry, that
sounded like a "yes" and a "no." Yes, the
guidance says that they should be considered in the same way and
to the same extent and level of detail, but then you wanted to
add a rider, "But of course, we are not going to do that."
Anne Stuart: Sorry, I mean not
as part of the appraisal of sustainability. What I meant is that
we didn't write NPSs for all the alternatives. We had lots of
alternatives, but once we had assessed them
Q48 Barry Gardiner: But the alternatives
are not addressed in the same way and to an equivalent level of
detail, are they?
Charles Hendry: In what respect?
Q49 Barry Gardiner: In the guidance,
it says that the application of the SEA directive means that the
alternatives to the NPS policies should be addressed in the same
way, in the same manner and to the same level of detail. That
is not the case, is it, in what you are doing?
Anne Stuart: We have done that
in the context of the SEA directive. Once you have chosen the
alternative, you are not required to carry on doing everything
on the rejected alternatives. We have worked on the nuclear one.
Hergen Haye: I would say that
we did very carefully consider the alternate scenarios. Obviously,
one could stipulate lots and lots of different scenarios.
Q50 Barry Gardiner: It is not
about stipulating lots of different scenarios. If you are setting
up genuine alternatives, you have to give them the same level
of consideration, and you have to show the same level of argumentation
and reasoning for one as for the other. One may be your preferred
alternative, but you have to give each a fair crack of the whip.
Hergen Haye: And that has happened.
Q51 Barry Gardiner: You say that
Is it also the case that the Government's own
guidance is that consultation of the public should always be at
a stage when the options are still left open?
Charles Hendry: The approach that
we take to consultation is very often that the Government express
a preference, and a desired way forwarda "minded to"
approach, essentiallybut then we will often set out the
other alternatives and why we believe our chosen way is a better
way of achieving that. Consultation on one option doesn't sound
to me much like a consultation, however, so there clearly have
to be other options within it.
Q52 Barry Gardiner: Indeed. And
you don't feel that the alternatives have actually been ruled
out in the body of the appraisals?
Charles Hendry: I don't. In terms
of the way we have looked at how we need to move forward, we have
examined a broad mix of technologies but we haven't been completely
specific within that. We have said that we expect renewables to
be a very key part of the new generation capacity but that leaves
a very substantial amount for other technologies, which we would
hope to be low carbon. We have not ruled out technologies as part
of this process, however.
Hergen Haye: Maybe to add to that,
that is why, in a sense, we are consulting. That is why we have
put unfortunately rather a lot of documentation out there, to
show how we come to our conclusions and what the alternatives
we have considered are, so that members of the public or interest
groups can come forward and question that robustness. We would,
as part of the consultation, look very seriously at any submission
we receive to see whether we made mistakes.
Q53 Barry Gardiner: Good. Well,
have you received the submission from the RSPB, from which I have
Anne Stuart: On the latest consultation?
I have not seen anything from the RSPB.
Q54 Barry Gardiner: The RSPB said
that the appraisals "deal with alternatives in such a brief
and cursory way that they repeatedly fail to give meaningful information
about their likely impacts on the environment. Further, little
effort has been made to integrate the revised findings into the
content of the NPSs. Thus the appraisals do almost nothing to
increase the level of environmental protection provided for by
the NPSs." Do you recognise that?
Anne Stuart: Forgive me, but that
sounds like their comments on the last set of appraisals, before
they approved it.
Q55 Barry Gardiner: I can assure
you that it's in relation to the 30 November 2010 session.
Anne Stuart: They haven't sent
us that, I'm afraid, so I haven't been able to comment on it.
Q56 Barry Gardiner: Perhaps you
could have a good read of it and then provide a note to the Committee
as to what your views are.
Anne Stuart: I'll ask them to
provide it to us, because we certainly haven't received it.
Q57 Dr Whitehead: I would like
to move on to the overarching national policy statement for energy.
You have made a number of changes to the policy document compared
with the previous one. In particular, you've taken the needs analysis
beyond 2025 towards 2050. Do you think you've laid enough emphasis
in that on low-carbon generation and on the cumulative impact
of emissions from the infrastructure decisions being made now?
Charles Hendry: I think that the
Department's been very clear about the process in setting out
various pathways towards 2050, looking at the legal requirement
on us to reduce our carbon emissions by 80% by 2050 and what sort
of different scenarios could enable us to get there. So I think
that all the approaches that we've taken work towards that 80%
legally binding requirement.
Q58 Dr Whitehead:
In the document itself, you calculated that 26 GW of required
new electricity capacity, over and above the 33 GW that would
need to come from renewable sources, would be effectively determined
by industry. Bear in mind that already there is 9 GW of capacity
in planning permission, a good proportion of which is gas. Quite
a lot of gas is already in the planning pipeline. It may look
to the outside observer as if this is a charter for gas.
Charles Hendry: Again, one has
to look at this as part of a wider policy approach. The planning
approach is one element of it, and giving guidance for the sort
of application which could be considered and the right way to
consider it, but alongside that, one's got to look at the electricity
market reform packages, when we publish those shortly, because
they will very clearly indicate how we are going to be incentivising
people to invest in low-carbon technologies.
In terms of the figures that you've put out,
yes, we believe that there's a need for 59 GW of new capacity
to 2025. A significant proportion of that, 33 GW, we hope will
be renewables, of which 2 GW is under construction. The other
26 GW would include nuclear and, hopefully, other low-carbon technologies.
We cannot be clear at this stage exactly what, for example, coal
with carbon capture can contribute. We don't know for certain
how the technology will work or what the cost will be of implementing
it, so we have to maintain within there some degree of flexibility.
The other thing that I think we should take
account of is that our expectation is of a massive increase post-2025
of electricity generation as we decarbonise heat and move towards
electric heating and electric vehicles. We need more base load
if we're going to have more electric trains. Beyond 2025, there's
going to be a very significant need for additional electricity
generation, rather than what is simply required to replace that
which is coming out of commission.
Q59 Dr Whitehead: But doesn't
the need case that you put here not only overstate the need for
gas generation but, by doing thatfor example, suggesting
that the 9 GW of projects that have obtained planning permission
but may not be built be discounted in terms of calculationsrather
embed gas in the structures, so that the arguments that you put
forward for additional electricity generation will be overshadowed
by the fact that we will have a new generation of gas, according
to the need arrangements that have been put forward in this document?
Charles Hendry: I absolutely believe
that we need new gas in the system. If you look at the other areas
involved as we move towards a low-carbon economy, the time scales
mean that we have to have investment in new gas in the meantime.
The first time that nuclear could be brought on stream is 2017
or 2018. Coal with carbon capture is still going to be at a trial
stage by the end of this decade. The massive roll-out of renewables,
particularly offshore, is going to be at the end of this decade
and beyond. The development of tidal technologies will be in the
In terms of the pressure on us to replace a
great deal of the plant that is coming out of commission, we lose
a third of our coal in the next few years and much of the rest
by the end of the decade, and most of our nuclear by the end of
the decade. In terms of the new generation capacity that is there,
gas has to have a role to play in that. We also have to look atthis
is not a planning issue so much; it's a policy issuehow
we decarbonise that by the 2030s. We have a short-term need to
secure new gas generating capacity, but we have to look at that
at the same time in terms of how one might drive forward decarbonising
it in due course. That's why we're also looking, for example,
at CCS on gas as part of the pilot projects.
Q60 Dr Whitehead: You've perhaps
gone beyond the question of there being a need for some new gas
towards the fact that most of the balance of the required additional
capacity could well come from gas. You specifically made reference
in NPS 1 to a balance of 18 GW coming from non-renewable capacity,
which, for reasons I've outlined, could well be almost entirely
gas. The suggestion that those 18 GW might come from other things
is a function of the time scale as to when those other things
might come on stream. The default in those circumstances may well
be gas, and there doesn't appear to be any mechanism in this document,
bearing in mind what you have said about decarbonisation, easily
to overcome that
Charles Hendry: But one has to
separate, then, the two parts of the policy. This is about planning
rules; this is about what is permitted to be built. Alongside
it, though, one would be looking at how one charges for carbon,
so the Treasury-led consultation that takes place shortly on putting
in a carbon taxa carbon floor pricewill be part
of that process. We'll be doing work alongside that, looking at
how one incentivises investment in low-carbon technologies more
generally and looking at a range of options for how that should
No one is going to be committing at this stage
to investing in new gas plant until they know the financial circumstances.
That's the other part of this programme, which we start to consult
on in the next few weeks. Yes, a great deal has been consented,
but from the contact that I have with the energy companies, I
would say that those investments are far from certain. Under the
regime that we inherited, the default mechanism would be gas,
without any doubt, but what we are saying is that if we're going
to encourage investment more generally in low-carbon technologies,
a different financial structure is going to be necessary as well.
Q61 Dr Whitehead: But meanwhile
you've changed the projections for gas demand in this document.
Charles Hendry: Based on the most
up-to-date figures available to us.
Q62 Dr Whitehead: So is it your
view, bearing in mind those changing views on gas demand, that
these NPSs would need to be kept up to date?
Charles Hendry: We will constantly
have to keep up to date the estimates for where we think gas demand
is going to go. In terms of energy security, if we are going to
be increasingly dependent on imported gasthe expectation
is that we will be and that 65 to 75% of our gas by 2020 could
be importedthat means we have to have assurances about
what storage, what pipeline infrastructure, and what LNG infrastructure
will be necessary. While we're not saying that is necessarily
our desired outcome, what we should be saying is that, if that
is the outcome in terms of how much gas does end up coming into
the system, how do we ensure that we have the security-of-supply
side covered as well?
Q63 Dr Whitehead: But doesn't
this, in cumulation, simply disappoint, frankly, the recommendation
of the Committee on Climate Change that the power sector should
be substantially decarbonised by 2030, unless, as you say, there
is perhaps a very high level of CCS applied to gas in the run-up
to that period?
Charles Hendry: I think we would
expect the system to be substantially decarbonised by 2030. I
think that if people were investing in a new gas plant now, they
would undoubtedly in the next 20 years recoup the investment that
they have made many times over. After 2030, I think the Committee
on Climate Change would envisage some of them to be either retrofitted
with carbon capture technology at that time or used as a peaking
plant, which will still be an important part of the mix. We will
still need that on cold winter days or to provide back-up for
renewables. So they will have a continuing role.
Dr Whitehead: Unabated peaking plants?
Charles Hendry: Looking at gas,
they still have a limited number of operating hours when it can
contribute to that process.
Q64 Chair: Can I just pursue this
point? You referred to a substantial increase in electricity requirements
after 2025 because of heat, and electric vehicles, and we all
understand that. Then you said that people investing in new gas
capacity will have recouped their investment by the time it is
necessary to substantially decarbonise the generation process.
I am not quite sure how those fit together, because some of this
new gas capacity is not going to be built in the next couple of
years, but in the latter part of the coming decade. We still have
no certainty that CCS is going to work on a commercial basis.
So you could have a huge amount of gas capacity built between
2015 and 2020 that becomes unusable after 2030.
Charles Hendry: And that is exactly
the discussion that we will be having around the emissions performance
standardabout how it should be implemented, whether it
should be on coal or on gas as well and whether there should be
a requirement to retrofit. Those are exactly the areas that we
need to explore. If people do not have the certainty, it is very
hard to see how they will secure an investment decision. They
need to understand what the long-term environmental requirements
Q65 Chair: Substantially decarbonising
means getting the emissions per kilowatt down to about 60 or 70,
Charles Hendry: In terms of the
initial drive, the EPS has been clearly looking towards coal,
particularly unabated coal, and saying, "We don't believe
that there's a future for unabated coal in this country at all."
It is then about looking at whether that should be applied to
gas in due course. An alternative to thatthe Committee
on Climate Change has been exploring thisis asking whether
the plant can be used for a number of operating hours, so it is
there to provide back-up capacity rather than having to build
a new plant that will not be used on a full-time basis. But at
the same time, if you look at what has happened with the large
combustion plant directive, where there was a very clear end date
by which plants have to comply with certain emission standards,
the company has to decide whether there is enough life left in
the plant to justify retrofitting it with the FGD technology to
meet the emissions level. Those same commercial decisions will
need to be made. But I absolutely accept that until there is clarity
in this area, it is hard for businesses to make a commercial decision
on the right way forward.
Q66 Chair: I think the clarity
needed is whether the Government are serious about achieving the
objective. The sums just don't add up. If you say you've got to
get down to average emissions of 70 per kilowatt hour by 2030,
and unabated gas is about 400 to 500, there could hardly be any
role, apart from a tiny bit of peak demand, for unabated gas.
A company that is thinking of building after 2015 is not going
to convince investment. The anxiety that we have is that the challenge
is much more urgent than what the policy is capable of delivering
at the moment.
Charles Hendry: I don't agree
with that. We have been putting in place the most substantial
reform of the market in 30 years. We believe that the existing
system simply would not attract investment. What we don't know
at this stage is where the investment will be coming through,
but we believe that the United Kingdom is now one of the most
interesting places in the world for new nuclear. One can look
at the companies keen to build here and without subsidy, and we
hope that that is going to be a key part of the mix going forward.
We have committed £1 billion to CCS, which
is more than any Government anywhere in the world have committed
to a single plant, and I think that shows that we are determined
to lead in that technology. We have extremely ambitious plans
for renewables, and we're looking at the right financial structure
to drive forward the development of offshore wind, biomass, any
other renewable technologies and further development of onshore
We also recognise that there is a need for gas
in that mix. Gas has often been the missing part of the energy
narrative. The typical emissions level of a new supercritical
gas power stationan IGCCwould be 350 grams per kilowatt
hour. Clearly, with carbon capture and storage, that can be brought
down significantly further. Advancing technology will bring improvements
as well. But we are certainly within this 20-year window. There
is no doubt that, given the much lower capital costs of investing
in gas and other alternative technologies, people can recoup the
cost over that 20-year period. By the spring of next year, at
the end of the EMR process, which will set out the whole of the
future funding strategy and will also look at the emissions performance
standard, people will have complete clarity on what the market
is going be like looking forward.
Q67 Chair: And that is coming
out on 16 December.
Charles Hendry: It is coming out
Q68 Barry Gardiner: Minister,
are you a supporter of AV?
Charles Hendry: Of the alternative
vote? No, I'm not.
Q69 Barry Gardiner: So why are
you going for it when it relates to gas? Gas is the AV strategy
here, isn't it? It's everybody's second best. It doesn't achieve
the carbon savings that we need. What you are doing here, by adopting
this strategy, is pursuing a route that you think is likely, but
you only think that it is likely because you are not prepared
to give clear policy signals on nuclear as a Government, because
of the political problems that you have as a Government, over
it. It was very interesting to hear the CBI stressing today that
they need much clearer signals from the Government on nuclear
in order to get over this problem.
Charles Hendry: I find that absolutely
extraordinary. I can go into the AV system and why I am not a
fan of it, but the Chairman may think that that was a slight diversion.
In terms of what we have done on nuclear, we
have re-consulted on the national policy statements, which we
accepted from the previous regime, and which had not been as robust
as they needed to be. That is a key step forward. We have taken
a process of regulatory justification through the House. Bizarrely,
that was opposed by the shadow Business Secretary, the shadow
Chancellor and the shadow Education Secretary, who actually opposed,
in one of the biggest votes500-plus to under 100the
regulatory justification process. That was a key legal milestone
as part of that process. We have looked at the nature of subsidy.
We have defined what that would be, and industry is happy with
that. We are much more urgently taking forward how one assesses
the full lifetime cost of dealing with nuclear waste and spent
fuel, and doing that in a way that industry is content with. We
are looking at the whole process of a carbon floor price, which
industry has told us is important. We are looking at other financial
drivers to support investment in low-carbon technologies.
When you look at that in the context of seven
months in government, it is an enormous amount of progress on
nuclear. Nobody can look at this Government and say that we have
not been driving forward that agenda, to the extent that I think
that we are the most exciting place in Europe, and probably one
of the most exciting places in the world, for new-build nuclear.
That is one part of the strategy. We are also
taking forward policies to make it more attractive to invest in
renewables and to invest in coal with carbon capture, but we still
see that there is going to be a need for new gas as part of that
process. Investors are keen to do it, but they need to understand
what the market system is. We have had seven months to start putting
that in place. It is a shame it wasn't done years ago, but, nevertheless,
we are doing it now.
Q70 Dr Whitehead: So, on the basis
of that argument, what proportion of the balance of 18 GW to come
from non-renewable capacity would you think would come from new
Charles Hendry: We, in this process,
have identified sites that would allow for 16 GW of nuclear.
Q71 Dr Whitehead: Sixteen out
of the 18 by 2025?
Charles Hendry: But look at that
not just in terms of what the need is for 2025; one has to look
at the greater electricity demand that is going to be in the system
as we electrify the transportation system and the heating system
moving forward from that.
Q72 Dr Whitehead: To be clear,
a strategic view would be that, out of that balance of 18 GW,
90% would come from nuclear by 2025.
Charles Hendry: The 18 GW doesn't
take account of what is fully under construction at the moment,
but, in terms of the way that we are looking to take this forward,
we believe that there is interest in building 16 GW of nuclear
power. That is what the potential investors have told us. We believe
that that is an important part of the balance going forward. We
believe that coal with carbon capture will be a modest part of
that by the earlier 2020s, but we want to see that moving forward
thereafter. One shouldn't just see this as 2025; this is for what
our electricity need is going to be up to 2050, and so 16 GW of
nuclear coming through over that time scale would go towards that.
Q73 Dr Whitehead: That's about
two nuclear power stations every year from 2018 to 2025.
Charles Hendry: That is what those
in industry say they are keen to invest in and build, in order
to give us a balanced portfolio.
Q74 John Robertson: Minister,
it is not often that you and I agree on things, but we do agree
with each other about nuclear, which is an interest of mine as
chair of the all-party group on nuclear energy. I want to jog
your memory a little. You used to sit in the seat where Barry
Gardiner is sitting today, and we were talking about gas and CCS.
You were vehemently fighting for the trial periodsgas being
one of them. We know that the first one is on coal, but the other
three have not yet been given out. What are you doing to ensure
that one of them will be about gas?
Charles Hendry: We've announced
that we are keen for gas to be part of the project. We did a market-sounding
exercise to see the sort of projects that industry was interested
in investing in. What came through clearly was a strong interest
in gas and in some pre-combustion facilities, and a great interest
in greater collaboration between companies than was allowed on
project one. Therefore, we have opened up the competition for
the next project to gas as well.
Q75 John Robertson: Let me raise
something that I raised last week with your Department, which
I imagine you were told you about. I have heard complaints from
companies that are involved with the project in Scotland saying
that feet are being dragged at the moment, and that the No. 1
trial is behind schedule. Is that true? If so, what is happening
with the other three projects? How far behind schedule are they?
Charles Hendry: The competitions
are completely separate. In the first competition we are down
to one company, Scottish Power at Longannet. It is in discussions
with the Government about how it would use the £1 billion
to deliver the outcome that we are keen to have. There is a feed
process looking at the actual costs, structures and technologies
involved. It was keen to continue that work, which will go through
to the spring. Therefore, we are looking to see how we can secure
closure on that competition. The additional competition will be
for three further plants. We will shortly be announcing exactly
what the criteria for those will be, and stating whether we will
announce that all in one go and look for different applications
for different types of projects to come through.
Q76 John Robertson: Do you have
a timeline for each one of those projects?
Charles Hendry: We are looking
for the Longannet one to be operational by 2014 to 2015, which
is what Scottish Power tells us it believes it can deliver. The
others would depend on the technology. They will predominantly
be new build plant. If it is a full-scale coal plant with carbon
capture and storage, that will realistically happen in 2017 or
2018. If it is a pre-combustion facility, it could be much quicker.
Q77 John Robertson: Let me jog
your memory once again. The document I have in front of me is
the Energy and Climate Change Committee's proposal third report.
Funnily enough, your name is on it. You were very happy to go
along with the fact that we wanted to listen to the Committee
on Climate Change and make it part of the process. Why have you
changed your mind?
Charles Hendry: We haven't. We
asked for its advice. It said that gas should be part of the process
and we responded by saying, "We'll make it part of the process."
That is listening very carefully.
Q78 John Robertson: Let me rephrase
that. You've disregarded the recommendations.
Charles Hendry: In what respect?
Q79 John Robertson: Let me see
what is written here. The question I was to ask you was: why did
you choose to disregard the Committee's recommendations concerning
the possible role that the Committee on Climate Change could play
in guiding the consent and review processes for national significance
in energy infrastructure projects?
Charles Hendry: Because, as I
was explaining earlier, this is about the planning process and
not about the sustainability and the low-carbon aspects. We worked
very closely with the Committee on Climate Change, and ensured
that we asked it for appropriate recommendations. We took very
close advice in relation to how we should be decarbonising the
economy. That is separate from the planning process. We believe
that the Government should be setting the sustainability criteria.
That is a matter for Government policy, and there should be a
separate process to guide that planning process.
Q80 John Robertson: But do you
take regard of what the Committee says?
Charles Hendry: Certainlywe've
asked it whether the 2020 renewables objectives are reasonable
and whether we could even aspire to go further. Members of the
Committee came back and said they believe that they are about
right. We have asked them to do further work for us, which will
include recommendations on planning systems.
Q81 John Robertson: Okay. Why
did you reject the Committee's recommendation on a hierarchy of
technologies to guide the implementation of the NPSs?
Charles Hendry: We don't believe
that it is right for the Government to specify exactly what we
want in each area. That would be the only way that one could deliver
that hierarchy. We do want new nuclear and we want coal with carbon
capture. We do want renewables. We don't yet know what each of
those technologies can deliver. We don't know which industries
and markets will come forward as bids are made for new generation
capacity. The one thing that we do know for certain is that, if
we say we want this much, they will come back to us and say, "Well,
if you want that much, you'll have to pay more for it."
Q82 John Robertson: That is exactly
what you said to Alan Whitehead in relation to the energy production
required from nuclear. You told us about 18 GW, 16 of which are
going to nuclear. You are, therefore, putting them in a position
where they must deliver.
Charles Hendry: We've identified
sites and industry we believe are appropriate for new nuclear
investment. We have taken some sites in Cumbria off the list,
which we felt were inappropriate for new nuclear investment, but
other sites could come forward. It is not an exclusive list. If
people want to come forward with an application to build a new
nuclear facility on a site not on that list, they are entirely
free to do so. It is more challenging to do so than on a site
that has been approved by the Government as being site-appropriate.
We are not saying that we are committed to 16 GW of nuclear, but
this process has identified sites.
Q83 John Robertson: So would I
be right to assume that it is a minimum of 16 GW?
Hergen Haye: In the sites that
we have identified, we were guided by the possibility in terms
of what can be constructed. More importantly, we were also guided
by what industry is saying it would like to invest in. Collectively,
the three consortiums identified some 16 GW of new-build nuclear.
That is their plan, but that is not to say that it will happen.
There are many drivers that will influence their investment decisions.
As you know, it is an extensive and expensive process to build
nuclear plants, so we can only rely on what industry has announced
so far. We want to make it possible, but we don't know whether
it will be 16, or more or less. As the Minister has said, it is
for energy policy to determine whether there should be the possibility,
through planning, for the IPC not to reject another technology
that makes an application.
Q84 John Robertson: In that case,
what's plan B? What happens if they don't get to 18? What happens
if it's 14 or 12? What are you going to do?
Charles Hendry: There is flexibility
in the system, but we are in a situation in which we face a mountain
to climb, because of the failure to secure adequate investment
in the past. It has been clear for some years what is coming out
of commission, and it would have been better if more was under
construction now. You and I would agree that the five-year moratorium
on nuclear was unhelpful to that process. We have to start from
the position that we are in, and we have to be realistic and put
in place a financial structure that we believe will attract investment
in a whole range of technologies. We have to recognise that this
is not the best place to have started from, and it would have
been better if we didn't have to climb up such a cliff.
Q85 Chair: Some of these nuclear
sites may have two or three plants on them?
Charles Hendry: Yes. Absolutely.
Q86 Laura Sandys: I want to pursue
the issue about the Committee on Climate Change, because it is
not even being made a statutory consultee on the NPSs.
Anne Stuart: The Committee on
Climate Change is a statutory consultee on the NPSs, but it is
not a statutory consultee on individual applications. So it has
been invited, and it has made some helpful comments on the NPSs
themselves. We are not proposing that the IPC should consult it
on every individual application that comes in, because, as the
Minister has said, that is more a matter of individual planning
decisions than the policy area in which it would normally be involved.
That doesn't mean that, if it had strong feelings about a particular
application, they couldn't put forward views and that those views
wouldn't be listened to very carefully, but we wouldn't expect
it to do that in every case.
Q87 Laura Sandys: The issue is
that we have many different objectives and the planning process
is meant to deliver those objectives, one of which is our carbon
targets. So in many ways it seems strange that, as an adviser
to Government and as an independent body, it is not part of that
debate, because climate change is as much a security risk and
should be as much a part of this process as the energy security
and energy generation aspect. Would you reconsider that?
Charles Hendry: On individual
planning applications, I think we would completely overload them
if, every time that there was an application for a wind farm,
a grid connection, a gas plant or whatever it happens to be, they
were formally consulted.
Q88 Laura Sandys: So they've actually
said they don't want to be?
Charles Hendry: I don't know whether
they've formally said they don't want to be, but our view is that
the role which they can most constructively play is in overall
strategic policy for how we move towards a low-carbon society,
decarbonise and meet the 2050 and 2020 targets. We think that
there are other policy drivers which help to deliver that. We
know that there are legally binding targets on us for 2020 and
2050, and therefore the policy drivers which we've put in place
are geared towards that. We don't need to consult on every individual
application along the way.
Q89 Laura Sandys: And the proposals
that you've put forward, they've come back positively? They feel
that these will drive investment in the right direction?
Charles Hendry: They're supportive
of the work here, and they're also supportivethey'll be
producing their own report, I think, in the next few daysof
looking at the market reform mechanisms and exactly what is necessary
to stimulate new investment in these technologies.
Q90 Dan Byles: Minister, you've
said quite clearly that there is no place for unabated coal. Would
it be fair to say that if CCS turns out to be economically and
technically not feasible, we will see an end to coal-fired energy
production in the UK?
Charles Hendry: There is no future
for coal without carbon capture in this country. The technology
is taking this forward to try and ensure that we develop appropriate
technologies that allow coal to be part of the mix.
Q91 Dan Byles: But that's still
assuming that CCS will work, which is not a given. I think that's
why we're investing £1 billion in seeing whether it does
work, but it's still the case at the moment that there is no commercial
CCS coal-fired power station working anywhere in the world.
Charles Hendry: Absolutely. There
are projects that do individual elements of it, and the challenge
now is to bring those together. We don't see any technological
or technical reason why that shouldn't be possible. The key element,
therefore, is going to be at what cost we can deliver that.
Q92 Dan Byles: Exactly. Is it
economically feasible and not just technically feasible? Would
you be comfortable presiding over the end of coal-fired energy
production in the UK, from an energy security point of view, if
that's the outcome if CCS does not turn out to be feasible?
Charles Hendry: I think that's
why we have to have a broad mix of technologies coming forward.
Each technology has its own contribution, which it makes in a
different way. Nuclear, by definition, is base load. One doesn't
want to be turning it on and off; one wants it to be running 24
hours a day, seven days a week. Renewables, inevitably, are going
to be flexiblethat's an inherent part of the process. Therefore
one needs some balancing technology, which can be coalbut
clean coalgas or biomass, which have the variability elements.
One has to look at the whole range.
That is also why we're looking at other areas
in terms of how one gets additional back-up capacity: interconnectors
to Norway or elsewhere in Europe. We're looking at how we work
with other countries, and an all-islands approach around the UK
to free up resources that could otherwise be stranded. We're looking
in a more holistic way than perhaps has happened before at how
we make sure that we have enough supply to meet the demand.
Q93 Dan Byles: I'm still nibbling
away at plan B. I know we've asked you before, but what if CCS
doesn't work? It seems to me that we're betting a huge amount
on CCS working. Do you think that the emissions performance scheme
will be flexible enough to cope if CCS doesn't turn out to be
economically feasible for coal or for gas? It seems to me that
gas or coalor somethinghas to be in the mix. As
you said, we can't survive with nuclear and renewables alone;
it simply won't work. If we're basically saying that unabated
gas is going to be used only for peak productionif that's
the only scenario in which you'd consider that continuingif
CCS doesn't work, we have a problem, don't we?
Charles Hendry: We don't have
a problem on our own; this is a global problem. If one looks forward
to 2050, hydrocarbonscoal and gaswill still be a
critical part of the world's energy infrastructure. That's why
there is so much work going on around the world to try to make
sure that CCS does work and is made affordable. It's encouraging
that countries such as China are putting an enormous amount of
resource into this area as well, because it is clearly one of
the countries in which it can make the most significant difference.
We are absolutely committed to making sure this
works. We're committed to being a global leader in the technology
and we will put everything that we can into ensuring that it does
work and that it's something that Britain gains out of commercially
as well. We don't start off from a position of saying, "What
if we fail?", because that tends to increase the prospect
that you will fail. We're starting off with a determination to
Q94 Dan Byles: But I don't think
it's unreasonable to suggest that there should be some contingency
planning in case we do fail. We've asked you and the Secretary
of State, "What is the plan B if CCS doesn't work?"
The answer continually comes back, "It must work."
Charles Hendry: We are putting
a great deal of resource into making sure it does work, but the
plan B can be a range of alternatives. It could be biomass, which
has the same flexibility that coal can have but is obviously a
sustainable resource. It could be gas. It could be much greater
use of pump storage. For example, our chief scientist has identified
13 pairs of Scottish lochs where you can use cheap electricity
to pump up to the higher loch and then release the powera
huge amount of capacity at a few seconds' noticeand therefore
compensate for some of the variations that would otherwise be
We don't see an individual element that would
be the plan B, but we are certainly looking broadly across the
whole of the energy spectrum to ensure that if any particular
element doesn't happenthat could be nuclear, carbon capture
or a large roll-out of renewablesthere are other technologies
that can come in to take up the slack.
Q95 Dan Byles: If the individual
CCS plants do turn out to be feasible, we're also going to require
some sort of CO2 transportation network or grid. At
the moment there is no NPS covering CO2 pipelines or
CO2 transportation. Do you anticipate bringing forward
one to cover that some time soon?
Hendry: Under the current system,
the IPC would make a recommendation on a CO2 pipeline
as part of the planning process more generally. We've taken the
view that that's one area of technology that is not sufficiently
advanced to have its own NPS at this stage, but clearly as that
technology comes forwardand we're looking at strategic
infrastructure of that nature because one would want to build
oversized pipelines rather than every individual facility having
the same pipeline connectionwe'll need to review whether
an NPS of its own would be important to deliver that.
Dan Byles: And would that include offshore CO2 transmission
as well as onshore CO2 pipelines?
Hendry: It would include both.
Anne Stuart: Offshore pipelines
would be under a different planning regime, because unless the
localism Bill changes the current IPC Planning Act regimeI
suppose it's possibleit will not cover the offshore element
of the pipe, which is one of the things that we're still working
out to make sure that things go smoothly.
Q97 Chair: When you say that there'll
be a global problem if we can't make the CCS technology work at
scale, that is clearly true, but of course it's a global problem
that's a lot more painful for some countries than others. We don't
need to look very far to see that the difficulties that they will
have in France under that eventuality will be much fewer than
Charles Hendry: Without doubt.
Individual countries have chosen their different energy paths
Q98 Chair: And we could still
do so. If we chose to, we could still decarbonise our electricity
generation by 2030 without having to rely on CCS.
Charles Hendry: By pursuing a
more aggressive nuclear approach.
Charles Hendry: I think that there's
also a technical capability for delivering. If one looks at the
fact that by 2023 all of our nuclear plants except Sizewell B
are due to have closed, the initial plants will simply be replacing
capacity that is coming out of the system, and it won't be until
well into the 2020s that one potentially starts to add to that.
There is a physical speed at which this can be done. I think that
most people look at the plans for new nuclear in this country
and think that they are extremely ambitious. It will therefore
be challenging to achieve them, let along to go much further.
Q99 Chair: But what we're saying
is that you can't build enough new nuclear in 20 years, even though
there is an established technology that is widely used in other
countries, but somehow, magically, we're spending £1 billion
researching a technology that no one in the whole world has ever
made to work, and it's going to be so successful that in the space
of about five or six years after we've suddenly discovered it
that we're going to be able to do all we need to do. If a business
adopted that sort of strategy, and said that it was going to bet
the farmthe whole businesson the possibility that
its research works and that it was going to ignore proven technology,
it would be shelved and the City would sell the shares.
Charles Hendry: That's exactly
why we're not putting all our eggs in one basket. That's why we're
taking a broad approach to different technologies. If we aren't
doing the work on CCS, other countries will take it forward. We
might well end up applying it in any case. We have a fantastic
opportunity in this country because we have some of the best sequestration
sites in the world. We've got people who are used to working in
those conditions. We've got an oil and gas industry that can play
a very important part in making it happen offshore. We do have
a real opportunity to lead in that area. If we don't do it, I
think that some others will take it forward and we will end up
having to buy the technology in.
But we're not saying that it should be only
CCS; we're saying that CCS is part of the equation. We want it
to work, but nuclear should be part of the equation, renewables
should be part of the equation, and the Government should not
be saying, "We're ruling out technologies that at this stage
offer a great deal of promise."
Q100 Sir Robert Smith: I declare
my entry in the Register of Members' Financial Interests as a
shareholder in Shell. Do the French have a strategy for replacing
all their nuclear in time and at a cost that we could afford?
Charles Hendry: You might have
to ask the French Energy Minister to answer that question. Clearly,
taking account of the life span of a nuclear power plantthey
started this programme 30 years agothey have significant
opportunities looking forward.
Q101 Sir Robert Smith: For plan
A to work, it doesn't just need a good planning regime; it is
the Department and partners coming up with the competition. How
is the Department taking forward the regulatory regime so that
people know how they are going to have to operate if they are
Charles Hendry: For CCS?
Sir Robert Smith: Yes.
Charles Hendry: We have set up
a CCS development forum, which is based very much on the nuclear
development forum, to look at where the barriers to investment
are and to bring together the key players in the industry from
the oil and gas side, the generator side and the people who might
be involved in the carrying of the CO2. They are looking,
therefore, at where they see the barriers. We are consulting on
whether that approach should be done through a regulated Government
monopolyfor example a new carbon management authorityor
whether one can leave it to a more flexible system. We are looking
at exactly those issues for what will be necessary to encourage
investment to go forward more generally.
Q102 Sir Robert Smith: One final
thing. Coal can be flexible at the moment, but if it is post-combustion
CCS, my understanding is that that makes it a pretty base load-type
operation, because, for a CCS plant to operate, it has to be operated
in a fairly consistent fashion. It is not a flexible response.
Charles Hendry: Its flexibility
is diminished. It uses a great deal of its outputperhaps
a quarterto run the plant itself. Once it starts to operate,
a great deal of extra output is required to get the CCS plant
operational as well. It is not an absolutely smooth transition
and process in that respect. I think one might also need to look
at that system and say that there may be times of peak demand
when one would want every single element of output going into
the national grid. Therefore, one would say that the CCS facility
should be switched off in that period because it would seem to
be counter-productive to energy security needs otherwise.
Q103 Laura Sandys: Moving a little
away from planning structures and so on, when we start looking
at energy security, your response to Alan's point was that more
than 60% of gas will be imported. We have serious exposure to
a world that looks relatively insecure in many ways in which we
are going to be importing 35% of LNG and where trade groups are
starting to become a little more vulnerable with piracy. Who is
doing the cost analysis of that insecurity, and is the National
Security Council also looking at the risks that we face? Ultimately,
a Government have to keep the lights on, and if we end up in a
situation in which certain politicised Governments are selling
us energy, we will be very vulnerable. In many ways, I come back
to the Chair's point that there are tested technologies that can
deliverparticularly nuclear. We are exposing ourselves
to a period of risk when the politicisation of energy is increasing.
Charles Hendry: But we also have
to recognise the time scale involved in building a new plant.
If the go-ahead was given tomorrow morning, with the full planning
process approved, it would still take six years to build a new
nuclear plant. Most of the others don't have their investment
packages ready and do not have board approval. EDF at Hinkley
Point C would hope to be on power by the end of the decade2017-18and
others would follow quite quickly after that, but there is no
possibility of doing anything before that time. The businesses
involved simply cannot make it happen.
Q104 Laura Sandys: What is the
risk profile between now and 2030 of being exposed to that amount
of imported energy from countries that might use it in a political
fashion, or certainly with financial leverage?
Charles Hendry: We need to take
different responses to address the energy security issue, which
you quite rightly highlighted. I have given licences for new gas
storage facilities that would double our national gas storage.
One of those hasn't yet got the final investment decision, but
they will be significant infrastructure investments.
In answer to your question, the National Security
Council does look at this and the Secretary of State is a permanent
member of the National Security Council. Part of its remit is
to look at our critical national infrastructure and to make sure
that is well protected and well looked after. We are taking measures
in the energy Bill coming through this winter that will put a
much greater obligation on the gas suppliers to ensure that they
have adequate supply to meet the demand that is there, with punitive
charges if they fail to do so. We believe that that will drive
additional investment in storage, pipelines and LNG facilities.
What we are trying to do is to respond to the threat that is out
there of greater gas imports coming from a wider range of countries.
Norway will still be our most important trading
partner. I've had contact and discussions with my Norwegian counterpart
to find out whether we can encourage them to build a new pipeline
to the United Kingdom. We are looking at how we can share in those
different aspects. I am going to Qatar in a week's time to make
sure that they understand our need for the tankers to continue
to come to Milford Haven, rather than going elsewhere around the
world. If there is a silver lining in the issue, it is the fact
that we are doing this at a time when the outlook for gas is benign.
We are finding that the development of shale gas in the United
States has completely stopped their imports of LNG gas. The gas
price has been relatively lowit is spiking at the moment,
but it has been relatively lowand we are therefore moving
into a period of fairly plentiful gas, but that will not make
us complacent. We will be driving forward measures to enhance
our gas security.
Q105 Barry Gardiner:
Given the winter supplementary estimates, I just want to take
the opportunity to ask the Minister, while he is here, what he
feels about the £52.5 million increase due to the British
energy liabilities provision, compared with the main estimate
earlier this year? Does the Minister want to comment on that for
Charles Hendry: We have looked
at the national policy statements and said that there are aspects
of the waste issue that they should look at more fully, particularly
the interim waste management on site as opposed to the deep geological
disposal facility. We believe that there is a moral imperative
on the Government both to carry forward decommissioning and to
look at a longer-term solution for waste management in due course.
We are taking forward the voluntarist approach for a geological
disposal facility. There is a nuclear liabilities fund to assist
that. The cost of the new waste that would be contributed by the
new plant would be covered fully by the companies responsible
for creating it.
Q106 Barry Gardiner: My question
related to the winter supplementary estimates, and the increased
call that you have had of £52.5 million in relation to those
liabilities provisions for British Energy. That seems to be a
rather large hike since March this year, and it really demands
some explanation as to why it was got so badly wrong before by
those who were doing the estimating for the Department, or what
has happened in the interim to cause such a large hike.
Charles Hendry: I am very happy
to write to you about that in more detail. It is slightly outside
the scope of this hearing.
Chair: More than slightly. By all means,
write to us about that, but I think I'd rather stick to what we've
got as we are running out of time.
Pincher: If I may drag you back to gas, Minister? We have
gone over it quite considerably in the past half an hour or so,
but you mentioned that we are looking to double our gas storage
facility. Does that mean that we're going to double it to two
days' worth of storage capacity? In answer to a parliamentary
question, in the past 12 months we have had as little as one day's
worth of demand stored. What do we anticipate to be the minimum
threshold of stored gas?
Charles Hendry: We see gas storage
as one of the elements; we don't see it as the only one. We have
storage capacity for 15 or 16 days' worth of gas supply at peak
winter demand. If that were doubled, at the lowest point it shouldn't
come down to two days' worth of gasas one would expect
in the middle of the winter, it comes down relatively significantly,
but it doesn't come down to those margins that I think we all
feel are much too close for comfort. As I have said, we see gas
storage as one of the elements, but we want to secure other pipeline
connections, LNG facilities, more interruptible contracts and
more long-term contracts on pipelinesall have a role to
play. Our view is that the Government haven't played a sufficiently
strategic role in looking at the gas outlook in the past, and
therefore what we should be doing is being much more engaged in
securing those long-term contracts. If that is with Norway, or
with Qatar, we believe that is an extremely secure arrangement.
There are areas where we think Government can play a useful role,
but at the end of the day storage is part of it but it is not
the only part of it.
Q108 Christopher Pincher: But
if we were to have 32 days' worth of storage, we would still have
far less storage than, say, Germany, France or the United States.
Why is that?
Charles Hendry: But one also has
to look at the extent to which they are import-dependent. Germany
is almost exclusively dependent on Russian gas. It has imported
Russian gas for 30-something years, and has never had an interruption
in that process right the way through the Cold War. It has a very
different situation from ours.
Clearly, the French use of gas is massively
lower than ours, because 80% of French electricity comes from
nuclear and much of the rest comes from hydro. So gas is not used
for generation but it is used for domestic and industry use. The
totality, therefore, of French gas storage is very different in
terms of the degree of usage.
Pincher: But they rely much more on nuclear, and you're suggesting
that we rely on a mixed supply. You have been very clear that
you are going to invest and put a great deal of effort into making
sure that CCS works, but, as we have heard, it might not. We are
investing quite laudably in renewables, largely in wind power,
which of course is intermittent. If we are going to rebuild our
nuclear capability, that is going to take time; you have said
six years. So there is going to be an interregnum, and there is,
therefore, going to be a reliance on gas. I just wonder whether
you are putting enough emphasis in the NPS on gas storage.
Charles Hendry: We are putting
the emphasis through other rivals. I think the most significant
change is the one in the energy security and green economy Bill,
which will put a much greater obligation on gas companies to ensure
they have enough gas to meet demand. Again, the NPSs are about
the right planning processthe new gas storage facilities
and parts of the gas networkbut what we are looking at
separately is how we really, truly address this issue of gas security.
As we move towards being increasingly dependent on imported gas,
we have to do much more than has been the case in the past to
secure those supplies.
At the end of the day, this is left to business.
I don't ultimately want this to be run by Government, and for
me to go into the office every morning and think, "How much
gas do I buy or sell today?" I am sure that would quite quickly
end in tears. Therefore, we want to encourage the market to operate
in this area, but to do so within a much clearer framework set
Q110 Christopher Pincher: In terms
of transmission of gas to where it will be used in the power stations,
are you confident that we have those stations; that we are building
more of them in the right place; and that the infrastructure to
transmit it is there? I read that the estimate of investment required
in the next eight years is some £32 billion. Do you think
that is an accurate sum?
Charles Hendry: I think the £32
billion is the National Grid's assessment of what is necessary
for infrastructure in both electricity and the gas network. We
certainly have no reason to dispute those figures.
There must be more interconnections, and one
of the very positive roles the European Union is playing in this
respect is actually looking at the role of interconnectors to
give security to member states. We are working very closely with
it in that work, which is very productive. It will be a key issue
for the Heads of Government when they meet to discuss energy issues
in February. It is about not only looking within the United Kingdom,
but how one looks internationally at the role of interconnectors.
Q111 Christopher Pincher: And
does that figure include the cost of mitigation of effect? We
have a localism agenda too, and we do not want to disrupt beautiful
rural parts of our countryside. Does that £32 billion include
mitigation? That could cost a couple of hundred million for sure,
Charles Hendry: In terms of the
electricity infrastructure, because the gas infrastructure is
predominantly buried and the electricity infrastructure predominantly
uses pylons. I am very pleased that some new work has been commissioned
through the Institution of Engineering and Technology to look
at the cost of undergrounding, because I receive a significant
amount of correspondence from colleagues who are very worried
about pylons in the countryside and the fact that they are much
larger than has historically been the case. What we need to have
is a much clearer and robust piece of science that looks at the
costs of undergrounding, because we hear great differences. Some
people say it costs four times as much; some people say it costs
14 times as much. So, we need a much better understanding of what
the actual costs are.
Q112 Christopher Pincher: You
mentioned the role of the EU. Are you working with our European
partners to encourage them to diversify their gas supply so that,
as Laura has suggested, it does not come from powers that may
not be quite as benign as Norway is to us? There is a trading
effect, isn't there? If the European lights are not switched on,
that affects us economically, regardless of whether we have an
economically safe supply of energy.
Charles Hendry: We are completely
interdependent now. The Russia-Ukraine dispute, nearly two years
ago, created great pressure in the United Kingdom, because a great
deal of our gas was shipped out through one of the interconnectors
into mainland Europe. The role of the interconnectors is extremely
important. Part of that process is also how we get new routes
to market, and how we manage to get gas from Russia or from central
Asia, and avoid the Ukraine. The Nord Stream pipeline, the Nabucco
pipeline and the South Stream pipeline are all part of that process.
As the European Union, we have a shared vested interest in getting
gas through a more diverse range of routes. Liquefied natural
gas is clearly part of that process as well. We are finding that
that is creating positive discussions between the suppliers and
the users. The Russians will continue to be by far the most predominant
supplier to Germany, particularly once Nord Stream is built. One
has to live with the reality of where the gas comes from, but
to ensure that some of the constraints that have come through
territorial disputes, such as Russia-Ukraine, do not have the
same effect in the future.
Q113 Dr Whitehead: Within NPS
5, on the electricity networks infrastructure, there certainly
seems at first sight to be a constraint on the extent to which
it may be possible to achieve sufficient guidance from the document
to bring forward strategic transmission capacity ahead of the
projects that may want to connect to it. The guidance is normally
that an application is based on a combined project and infrastructure,
and I think that there are only one and a half paragraphs of alternative
guidance under particular circumstances where transmission may
be in place without a project attached to it. Do you think that
that means that the whole purpose of bringing forward transmission
capacity ahead of plant could be thwarted by the document?
Charles Hendry: I think we were
right to separate out the two areas, and I will ask Anne to comment
further on that. There are certain areas where the National Grid,
for example, is keen to put in place the infrastructure, not on
a speculative basis, but ahead of where the development is going
to be. If it is not going to be a particularly long project to
build, the National Grid then knows that it can get its power
to market at the end of it. But on something like a nuclear plant,
we also thought that it was clear that some of the nuclear operators
would be keen to receive consent for their plant, and sort out
the complexities over that, separate from the National Grid connections,
so seeing them as two separate elements in that process. Anne,
perhaps you could comment further.
Anne Stuart: Certainly, it was
not our aim to prevent bringing forward effectively stand-alone
headlines, if they are needed, as you say, for a strategic thing.
Possibly, the emphasis on that aspect is more in the EN-1 in the
need case, where we are talking about the need for the strategic
routes that will pick up some of the things that are coming off
the new nuclear power stationsnot the immediate wire from
the plant, but the deep reinforcements that are necessary. We
would see that as being where the justification for the need for
the plant comes. Once you've said that is the need, of course,
the considerations for building a line will be very similar whether
it is connected to an individual project or whether it is a strategic
upgrade of some kind because you will still be looking at the
landscape impacts, the impacts on ecology, the nearness to areas
of outstanding natural beauty or whatever. So we wouldn't see
most of the pure planning considerations as being particularly
different if the need for that line is established.
Q114 Dr Whitehead: But do you
accept at the same time that because the document prioritises
joint applications and puts very specific requirements on stand-alone
applications, that may well shape a future centralised system,
when clearly many people regard the need for an increasingly decentralised
energy grid system as paramount in terms of the different forms
of energy that will come on to the grid?
Anne Stuart: We hope that we wouldn't
be preventing that. Obviously we have as much of an interest as
anybody in bringing forward that new grid that we need. I keep
being told that you mustn't talk about smart grid. It must be
smarter grid now, apparently. I am not sure why. But we certainly
are not aiming to prevent that. It is more that there is an obvious
need to connect a nuclear power station to the grid and it is
making it clear that where there isn't that obvious "It's
over there, it needs to be connected to here" need, there
is still a provision for lines to come forward, either separate
to the application that has already taken place or completely
Q115 Dr Whitehead: Do you think,
however, that in terms of those considerationsthe question
of strategic network strength in the new lines and the question
of the relationship with the infrastructural plant to each othera
national spatial planning framework is now rather important? In
your response to the last scrutiny of the previous planning statements,
you said that you were considering how best to take forward the
Government's plans for "a simple and consolidated national
planning framework covering all forms of development." Is
that under way at the moment? When might we expect that work to
Charles Hendry: A national spatial
strategy for all types of generation?
Q116 Dr Whitehead: Yes. I am merely
rehearsing what you said.
Charles Hendry: For nuclear there
clearly had to be a spatial dimension and there were sites which
were keen to be considered and we felt that in terms of the process
moving forward it was better to have a spatial approach for nuclear.
We haven't gone for a spatial approach for the other technologies.
We are concerned about the blight that that might bring. If we
identified and zoned part of the country in terms of where onshore
wind would be appropriate, colleagues would for ever be saying,
"Please lift that because housing in that area has been blighted."
We haven't gone for a spatial approach in that respect.
Q117 Dr Whitehead: So when you
say the Government are considering how best to take forward their
plans for "a simple and consolidated national planning framework"
your consideration has resulted in not taking it forward?
Anne Stuart: This is the difference
between what we are doing for the energy NPSs and the fact that
more centrally Government are working on the national planning
framework. Having said that, I don't have a date for when that
will be prepared. I know a lot of work is going on on it. I would
not expect it to be a spatial strategy of the type we are talking
about with nuclear which says, "There are places here where
you need things. There are places there where they are not suitable."
It is more likely to be something overarching that would stand
above the NPSs rather than something that would add additional
spatial detail to them.
Q118 Dr Whitehead: But do you
not think that the fact that we have all this new capacity of
different kinds coming on stream over the following yearswe
know offshore, for example, requires different forms of grid connectionmeans
that that kind of interactive, interdependent strategy may be
very important in relating the plants to the lines and the strength
of them? Minister, you mentioned, I thought very interestingly,
the identification of a number of lochs which we could pump water
up, so they would be sort of loch Dinorwigs. That requires new
transmission, probably in advance of that coming on stream. That
is the sort of issue which, presumably, would be part of a strategic
spatial planning framework associated with these transmission
Sir Robert Smith: If it was in England.
Dr Whitehead: Certainly,
yes. I accept that.
Charles Hendry: Certainly it needs
to be strategic. The national grid's estimate of the £32
billion for the infrastructure element which is going to be necessary
starts to give an indication of the scale of the challenge. I
think we have to recognise that where we have been generating
electricity in the past is not where we're going to be generating
it in future. Once there were historic coal-burning facilities
where the coal resources were, or next to big industrial centres;
we're now going to be seeing plants developed where the new resource
is available. Carbon capture and storage will be coastal, nuclear
will be coastal and offshore, and onshore wind will clearly be
where the wind resource is best. We're going to have to have a
different system for putting in place the grid network which will
respond to that.
I think, as part of that process, we've got
to have a system which appeals to investors. Investors need to
know that when they build their application, they will be able
to get their power to market, but we also has to have a strategic
overview. We don't want to have a situation where unnecessary
collections are being required because of short-term thinking
about, for example, where an offshore wind application comes onshore.
There's already controversy about the connection facility to the
national grid onshore, but also, if every single one came to shore
at its closest point, point to point, the national grid would
be required to spend billions on onshore connections which would
be extremely costlyunnecessarily soand extremely
controversial and unpopular. Having that strategic approach, as
well, is going to be part of that, and a wide net even further
offshore, looking at key connections to Norway and elsewhere,
which I think enhances our energy security and also provides us
with ways of backing up the demand when the supply may not be
Q119 Sir Robert Smith: On the
nuclear changes you've made, you're now assuming that a geological
storage and disposal facility will be available by 2130. That
still means that some of the earlier nuclear power stations, if
they go ahead, will have 110 years of storage on site. Would you
still agree that that's not really interim?
Charles Hendry: We have changed
the approach on this, because I think we recognise that the concept
of 100 years-plus is not what most of us would consider to be
interim. We have recognised, and the national policy statements
cover the fact, that a nuclear plant must look at the storage
facilities on site. We have reduced the time span for that based
on evidence given to us by the Nuclear Decommissioning Authority,
which now believes it doesn't need to be left on site to cool
for as long as it had previously suggested. Therefore, that brings
that period down from 100-plus years to perhaps 50 years for the
The approach which has been taken has been to
assume that all of the legacy waste would be put into a deep geological
disposal facility first, and then the waste from the new plant
would come in. Therefore, it requires that sort of time scale
to be in place to happen. To correct you, I think our assessment
is that 2040 is when it would be available if things move forward,
rather than 2030.
Q120 Sir Robert Smith: Or 2130.
Hergen Haye: The plan is that
the repository will be operational from 2040, but as the Minister
said, at that stage, it will then receive waste from existing
plants. You're absolutely correct that under the current timetable
and given current policies, the earliest for the repository to
receive waste from new build would be approximately 2130.
Q121 Sir Robert Smith: For the
sake of these NPSs, for a new nuclear power station, you are looking
at 2130 before you see that site losing its waste?
Charles Hendry: Indeed, which
would probably be beyond the lifetime of the plant, so that has
to be built into the design process. It is talking to the companies
involved as well, and the volume of waste is now significantly
less than was historically the case. It believes that, without
question, it is a manageable process.
Q122 Sir Robert Smith: When we
were looking at it, the IPC said that it could refuse a development
on the basis of local impacts. If a recommendation goes to the
Secretary of State that the local impacts mean a site should be
refused, could the Secretary of State overturn that?
Charles Hendry: Anne may wish
to comment further, but my understanding is that the Secretary
of State will take a view based on the evidence and the recommendation
that is given to him.
Anne Stuart: The Secretary of
State would certainly not be purely rubber-stamping the decision
placed in front of him; he would be making a real decision. Having
said that, I think that if he wished to depart from the recommendation
he would have to give reasons for doing so, so that it wouldn't
be purely on a whim.
Q123 Sir Robert Smith: Finally,
will you publish a timetable for developing the road map for a
safe geological disposal site?
Charles Hendry: We're taking that
forward, and we've set up a geological disposal implementation
board of which I am the chair and which met for the first time
this morning. The board will look at what is necessary to take
this to the next stage. We are very committed to the approach
of the previous Government, who took a voluntarist approach to
finding a community prepared to host this. That, inevitably, is
a gentle process. There have been three expressions of interest
from within Cumbriatwo from district councils and one from
the county counciland we are taking those forward. From
their perspective, I think they see this as being part of a nuclear
renaissance. It isn't simply a facility for looking after the
historical waste from the nuclear programme; they also want to
see a nuclear renaissance in west Cumbria. We are keen to take
that work forward more rapidly, because I understand why colleagues
here and others outside want to know where the site will be and
when it will be operational. So it is a gentle process for moving
it forward, but we recognise the need to move it faster.
Chair: Thank you very much indeed. This
has been a very helpful session, and we are grateful to you for
coming in. We look forward to seeing you again soon.